Babcock & Wilcox Revenue Doubles to $290.8 Million in Q3

Babcock & Wilcox Enterprises (NYSE:BW) posted third-quarter 2026 revenue of $290.8 million, more than double the year-earlier figure, and issued a higher adjusted EBITDA target for 2027. The 109% revenue jump from Q3 2025 came primarily from increased large-project volume, including $77.8 million from a current large generation project, according to Chief Financial Officer Cameron Frymyer.

Operating income climbed $3.4 million to $13.8 million, while net income rose $35.1 million to $93.9 million, helped by better operating results and a revaluation of warrants (financial instruments whose value shifts with the share price). Adjusted EBITDA — a non-GAAP earnings metric excluding items like interest, taxes and depreciation — increased $9.4 million to $17.7 million.

What's driving the backlog surge?

Third-quarter bookings reached $228 million, up 112% year over year, while backlog rose 571% to $2.5 billion, Chairman and CEO Kenny Young said. The parts and services business posted record bookings for the quarter.

Young said the pipeline of potential opportunities now exceeds $16 billion, broken down as:

• More than $10 billion in utility and industrial opportunities outside data centers
• More than $6 billion in data center projects
• Over $2 billion in potential BrightLoop opportunities tracked separately from the main pipeline

Pipeline opportunities represent prospective work rather than booked orders. Demand for reliable baseload electricity (always-on power supply) is prompting utilities to invest in existing coal-fueled plants, including refurbishment and recommissioning, Young said. He also cited opportunities in India and Southeast Asia, where natural gas is becoming harder to obtain for power generation.

The company expects significant bookings in Q4 2026 and Q1 2027, with some potential projects ranging from $200 million to $500 million and several larger opportunities under discussion. Young cautioned that deals aren't guaranteed: "There's always risk in anything until they're signed." He added the company is working through issues including risk, speed, performance and guarantees.

How solid is the 2027 outlook?

Babcock reaffirmed its 2026 adjusted EBITDA target of $80 million to $105 million and set a 2027 target of $125 million to $140 million. Young said the North Dakota generation project and continued parts and services demand will contribute next year, with prospective large bookings having a bigger impact in 2028 and 2029.

Frymyer offered a rough estimate that about 75% of the 2027 target would be covered by existing backlog or the recurring book-and-bill business, which typically generates roughly a couple hundred million dollars in annual revenue.

Frymyer noted gross margins were affected by work mix, including greater construction revenue and a labor availability issue on one construction project, which the company expects to complete by year-end and considers isolated.

What about cash flow and the balance sheet?

At September 30, total debt stood at $166.4 million, while cash, cash equivalents and restricted cash totaled $128.9 million. During the quarter, Babcock repurchased the remaining $61.8 million of its December 2026 bonds and bought back $38 million of common stock. Young said additional repurchases were under discussion but made no commitment.

Accounts receivable increased, lifting working capital, but Frymyer expects those receivables to be paid in Q4 and anticipates a "pretty decent amount of cash flow" in that period. He also expects a larger fourth quarter for parts and services following strong bookings, with demand carrying into Q1 as customers prepare for spring outages (planned plant shutdowns for maintenance).

On projects: the North Dakota development is progressing as planned, with nearly all permit applications submitted, county approval secured for conditional use and zoning permits, manufacturing underway, and on-site work expected to begin in early 2027. Construction runs through 2029 and into 2030. The commercial-scale BrightLoop facility in Massillon, Ohio — planned for operations in late 2027 — has nearly complete system components and site work has started. BrightLoop is already generating some revenue from engineering and front-end studies, with significant mature revenue more likely in 2029 and possible contribution in 2028.

In short: Babcock's numbers doubled, its backlog multiplied, and 2027 targets are now higher — with most of that target already backed by booked work.